Develop a Compelling and Effective Business Strategy
A compelling business strategy is a specific and cohesive story, that is rooted in the reality of the market, about an investment choice that a company makes.
To develop an effective strategy there are key principles and elements which need to be applied. This works both with projects that span the entire company and those across multiple business units.
My approach to a compelling strategy is based on being:
Specific about which vertical the investment takes place in, the problem that it addresses and the competitive advantage that it builds.
Current with the competitive dynamics within and adjacent to the vertical.
Confident in the market data it relies on and its source and methodology.
Balanced with the trade-offs that need to be made and opportunity costs.
It’s important to keep these principles in mind through-out the strategy development process and to double check that they are well represented as the final decision gets made.
Key questions to make sure that you are on the right path are:
Specific:
Is the vertical you’re investing in well defined? Where are its boundaries?
Who is the target audience / TAM? Who isn’t?
Is the customer problem an actual obstacle or job to be done?
What is the unique value proposition / competitive advantage? How much value add does it actually create for the customer?
How defensible is the competitive advantage to competitive pressure?
Current:
Is the market opportunity clearly defined? When will it close?
What are the main market dynamics which create and will close this window of opportunity?
Are there any recent or imminent developments that impact the opportunity window?
Are there shifts in other verticals that could influence developments in this one?
How well is the company positioned to take advantage of this opportunity?
Confident:
Are the data points used the most relevant ones?
Is there other information that can be gathered to increase the confidence in the investment opportunity?
Are the current market drivers and dynamics going to sustain for the foreseeable future?
What is the risk that dramatic and significant shifts will develop?
What is the medium to long term prospect of this opportunity? Does it affect the investment?
Balanced:
What are other current opportunities that are NOT being invested in?
What are the costs and the risks involved?
What are the trade-offs within the organization that need to be made?
How will the company and vertical be transformed by this investment?
What are the main missing pieces to the company being in a good position to capture the opportunity?
The answers to these questions are not always clear from the beginning and some of the answers will be surprising. And so are a lot of business decisions: there is no easy option available, so a thorough strategy development initiative is needed. The more impactful the business change is, the more it’s advantages, trade-offs and costs need to be considered and acted upon.